The Knight Frank Luxury Investment Index, abbreviated KFLII, is a composite benchmark of passion-asset prices published annually by the international property consultancy Knight Frank as part of its Wealth Report. It tracks the year-on-year and ten-year price movements of a basket of investible luxury categories, including classic cars, art, fine wine, watches, coloured diamonds, jewellery, rare whisky, coins, handbags, furniture and stamps. The index is widely cited in the trade and financial press as a barometer of the high-end collectibles market, although Knight Frank itself notes that it is a price index of dealer- and auction-supplied data, not an investible product.

Construction

Each component sub-index is supplied to Knight Frank by an external specialist firm: AMR Wine for fine wine, Stanley Gibbons for stamps, Stanley Gibbons for coins, Art Market Research for art, Watchcharts and Subdial for watches, the Fancy Color Research Foundation for coloured diamonds, and so on. The sub-indices are weighted within the composite using a methodology disclosed in the annual Wealth Report and reviewed periodically. Cars dominated the early-period weighting; watches and handbags have grown in influence in the post-2018 reports as those markets professionalised.

Movements over the recent cycle

Across the post-2010 period the KFLII rose substantially, with rare whisky and classic cars leading the composite for much of the 2013-to-2018 phase and watches dominating the 2020-to-2022 cycle. The 2023 and 2024 reports recorded a sharp deceleration in the watch and handbag components from their pandemic peaks, with art recovering modestly and rare whisky correcting from a 2022 high. Coloured diamonds have been a quietly persistent component, with the FCRF's argyle pink data pulling the sub-index forward despite the broader fancy-coloured market's softness. Jewellery, distinct from coloured diamonds in the index, has tracked the auction performance of signed pieces from Cartier, Van Cleef and Arpels, and Bulgari, with a long-term annualised growth rate in the high single digits.

Use and limitations

The KFLII is principally useful as a directional indicator and as a tool for client-facing wealth managers and family offices to frame conversations about passion-asset allocation. Its limitations are real: the underlying sub-indices are heterogeneous, the auction data they rely on is biased toward visible top-of-market transactions rather than the broad mid-market, and the composite obscures the substantial dispersion within each asset class. For Toronto retail jewellery purposes, the KFLII is best read as background context for client conversations about coloured-diamond and signed-piece values, rather than as a pricing reference for any particular stone. The Rapaport for diamonds, the Gemguide for coloured stones, and the major auction archives remain the actual pricing references for trade work.